Your estate may be liable for inheritance tax after you die – which could dig deeply into the legacy that you were intending to leave to your inheritors. The inheritance tax limit is not advancing as fast as increasing house prices, and as property is a significant portion of many peoples' estates, this means that more and more UK citizens are subject to inheritance tax after passing away.
The inheritance tax limit works as follows:
- The first £312,000 of your estate (including property and other assets) is free from taxation. This is the nil-rate band, the inheritance tax limit.
- Any assets in excess of the inheritance tax limit are subject to a 40% tax rate. This can include gifts and asset transfers from the past seven years, although there are also many exemptions and potentially exempt transfers that can reduce the amount of taxable assets.
For more advice on the inheritance tax limit and other inheritance matters, fill out our online enquiry form and you can get a free no-obligation first consultation with expert financial consultants.